Abstract
This article proposes a cardinal or an intensity measure of interpersonal envy by directly measuring the distance between the envied person's consumption bundle and the envious person's equilibrium indifference curve. The individual's intensity of envy is aggregated to form a social envy index, which in turn is combined with the Pareto criterion to form a social choice rule. This social choice rule generates a non-empty choice set with the fair set (envy-free and Pareto efficient social states) as a proper subset of the choice set. The intensity measure of envy is then applied to the Rawlsian problem of the “worst-off” person. It turns out that the person with the greatest envy need not be the poorest person. Finally, it is shown that if individuals have homothetic and identical preferences the measure of envy collapses into a measure of income inequality. This measure of income inequality satisfies soem appealing axioms.
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I am grateful to William Vickrey and Duncan Foley for orginally encouraging the idea of intensity of envy. This version has benefited greatly from suggestions and criticisms made by F. William McElroy
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Chaudhuri, A. Some implications of an intensity measure of envy. Soc Choice Welfare 3, 255–270 (1986). https://doi.org/10.1007/BF00292731
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DOI: https://doi.org/10.1007/BF00292731